A number of Lloyds Bank investors bringing claims against RBS in its mammoth £4bn shareholder battle have splintered away from the principal claimant group run by Signature Litigation.

The shareholders have instead turned to Mishcon de Reya partner Richard Leedham on their £420m claim for damages for nine pensions and investment management subsidiaries. Leedham came on the record last week in the High Court.

The move will cut the value of Signature’s claim, understood to be around 20 per cent of the total claim, by approximately a fifth, though the group still has over 35,000 investors on board.

The Signature action, led by partner Graham Huntley, is being brought against RBS’s former chief executive Fred Goodwin and three other directors over the bank’s 2008 rights issue.

The claimants allege the bank’s £12bn rights issue was defective and contained “material misstatements and omissions”.

It is understood the Mishcon group, which now includes claimants such as Scottish Widows, Clerical Medical Investment Group, Halifax Life and HBoS Investment Fund managers, will take a different tack on its claim.

A source close to the dispute said the splinter group could be bowing to pressure from senior banking officials to end its claim against RBS, adding it was “embarrassing” for Lloyds’ institutional investors to be suing another publicly-funded UK banking institution. 

A spokesperson for the RBS Shareholders Action group said: “It’s always been a surprise that Lloyds, a part state-owned bank, should wish to be involved in an action group against another majority state owned bank, and so their wish now to go their own way and to terminate their contract with the action group is not entirely unexpected.

“This changes nothing in relation to this group’s determination to obtain justice for our members, and we are delighted with the progress we are making following the appointment of Signature Litigation.”

Signature came on the record for the principal claimant group this summer following a disagreement over funds with its previous counsel Fladgate. The swap marked the second in this case, with the group previously turning to Bird & Bird.

Stewarts Law, Leon Kaye and Quinn Emanuel Urquhart & Sullivan represent the other claimant groups. The case is scheduled for December 2016.

RBS is represented by Herbert Smith Freehills. The Lawyer revealed in September the firm’s bill up to the end of a trial on quantum would hit £90m.

Lloyds Bank, Signature Litigation and Mishcon de Reya declined to comment.

The legal line up

For claimants, the Royal Bank of Scotland Shareholders Action group

3 Verulam Buildings’ Jonathan Nash QC, Peter de Vernueil Smith and Ian Higgins, instructed by Signature Litigation partner Graham Huntley.

For claimants, the Stewarts Law group

3 Verulam Buildings’ Andrew Onslow QC, Adam Kramer and Scott Ralston, instructed by Stewarts Law partners Clive Zietman, Keith Thomas and Fiona Gillett

For the claimants, the Leon Kaye group

3 Verulam Buildings’ Michael Lazarus, instructed by Leon Kaye partner Leon Kaye 

For the claimants, the Quinn Emanuel Urquhart & Sullivan group

One Essex Court’s Laurence Rabinowitz QC, Erskine Chambers’ Alex Barden and One Essex Court’s Maximillian Schlote, instructed by Quinn Emanuel partners Sue Prevezer QC and Martin Davies.

For the defendants, RBS 

Fountain Court’s David Railton QC and James McClelland, Serle Court’s David Blayney QC and Simon Hattan, 3 Verulam Buildings’ Sonia Tolaney QC, instructed by Herbert Smith Freehills partners Simon Clarke, Adam Johnson and Kirsten Massey. 7KBW’s Jonathan Gaisman QC, previously lead counsel, has come off the case.